The China North Industries Corp (NORINCO), a major defence supplier, said its plan to branch out into civilian products and capital investment has been successful.
"The company aims to develop into an integrated enterprise group with defence products as the core business, a specialized civilian-products operation integrated with research and development, manufacturing and marketing as the fundamental, and strategic investment as a new profit earner," said Li De, the company president.
"Trade in defence products will remain our core business," Li said. The firm will strengthen its core business, making further contributions to China's national defence industry, he said.
"But, with the development of both the domestic and world markets, enterprises merely focusing on trade cannot succeed in future market competition," Li said.
Based on its advantages in overseas market networks, the firm is expanding its business to civilian products, international engineering contracting, strategic investment in securities, the exploitation of petroleum and mineral resources, and high-tech industries.
The corporation has established several subsidiary companies specializing in civilian products, including NORINCO international, NORINCO motors, NORINCO optronics, NORINCO chemicals, NORINCO sports and NORINCO logistics.
"These companies have been growing well, each holding the competitive edge in their own business fields," said Li.
These specialist companies have developed from trading firms to enterprises involved in research and development, production and trade through mergers and acquisitions of manufacturing enterprises and co-operation with science and engineering institutions and universities.
These companies have plans to list on Chinese and overseas stock markets,Li said.
The holding company NORINCO international - the former Shenzhen Xilin Industries Co Ltd - listed on the Shenzhen stock market in 1998.
NORINCO optronics, a wholly owned subsidiary of NORINCO, is now undergoing a one-year "coaching" period required for listing. No timetable has been set for listing the other subsidiaries.
The company will also increase its strategic investment in business fields with high potential for growth, such as the high-tech industry, petroleum, and scarce mineral resources.
The company has invested in the financial sector and high-technology enterprises such as Dapeng Securities and Tsinghua Ziguang. At the end of last year, the Ministry of Foreign Trade and Economic Co-operation gave the company permission to trade in crude oil.
"The strategic investment made high returns for the company," said Li.
"We aim to reach an annual double-digit growth rate in the next three years," Li said.
With total assets of 25 billion yuan (US$3.02 billion), the company has an annual business volume of 20 billion yuan (US$2.4 billion).
The company has used a new logo since the beginning of this month in an attempt to change its original market image as a firm trading solely in defence products.
(China Daily ZHANG LU 09-01-2003)
